Technology major Microsoft will pay $20m in penalty to settle Federal Trade Commission (FTC) charges over alleged violation of children’s privacy law.

The FTC has alleged that Microsoft collected personal information from children who signed up to use its Xbox video game console.

Microsoft did so without notifying the children’s parents or getting their parents’ consent.

In addition, the company illegally retained personal information about child users.

According to the FTC, these acts violated the Children’s Online Privacy Protection Act Rule (COPPA Rule).

The order, which is subject to approval by the federal court, requires Microsoft to take steps to improve privacy protections for children using Xbox.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData

According to the regulator, the decree will expand COPPA protections to independent game developers with whom Microsoft exchanges child users’ data.

In addition, the order makes it clear that when gathered along with other personal data, avatars created using a child’s image, as well as biometric and health data, are covered by the COPPA Rule.

FTC director of the bureau of consumer protection Samuel Levine said: “Our proposed order makes it easier for parents to protect their children’s privacy on Xbox, and limits what information Microsoft can collect and retain about kids.

“This action should also make it abundantly clear that kids’ avatars, biometric data, and health information are not exempt from COPPA.”

In a blog post, Xbox Player Services CVP Dave McCarthy confirmed the settlement with the FTC.

“Regrettably, we did not meet customer expectations and are committed to complying with the order to continue improving upon our safety measures,” McCarthy said.

Last week, Amazon was ordered to pay $25m in fine to settle charges that its voice assistant Alexa violated the COPPA Rule.